Digicel (St. Lucia) Ltd & Ors v Cable & Wireless Plc & Ors

The standard basis is the normal basis for assessing costs. Indemnity costs require conduct or circumstances which take the case outside the norm. Where conduct is relied upon, the court considers whether its overall unreasonableness or inappropriateness makes it just to remove the paying party’s protection concerning proportionality and the benefit of doubt.

The court may reduce a successful party’s costs to reflect issues lost, costs unnecessarily imposed on the opponent and relevant misconduct. A nominal award does not itself prevent the opposing party from being treated as the overall successful party.

Following an earlier judgment on liability, the court determined the consequential orders in litigation concerning telecommunications activities in several Caribbean jurisdictions. All claims were dismissed except for an award of £2 nominal damages for breach of contract concerning the Turks and Caicos Islands.

The principal questions were what proportion of the defendants’ costs the claimants should pay and whether those costs should be assessed on the standard or indemnity basis. The court also considered a payment on account, interest, an extension of time and the costs of the costs hearing.

1. Disposition. The claims were dismissed in all respects except that the second defendant was ordered to pay the seventh claimant £2 nominal damages for breach of contract. That sum was to be set off against the defendants’ recoverable costs.

2. The standard basis is the normal basis of assessment. An indemnity order requires conduct or circumstances taking the case outside the norm. Where the paying party’s conduct is relied upon, the court considers its unreasonableness or inappropriateness in the context of the litigation as a whole. Length and complexity do not, without more, take litigation outside the norm. The ultimate question is whether it is just to remove the paying party’s protections concerning proportionality and the resolution of doubt.

3. The claimants’ deliberate failure to follow the pre-action procedure, their use of surprise publicity, the excessive breadth of their allegations, the speculative and weak conspiracy case, their serious allegations of wrongdoing and the substantial exaggeration of their claim cumulatively justified indemnity costs for the claims outside Trinidad and Tobago. Those features showed sufficiently unreasonable and inappropriate conduct to forfeit the protections of standard assessment.

4. Although the defendants were the overall successful parties in Trinidad and Tobago, the court had found conduct contrary to honest practices under section 4 of PAUCA. Costs could be reduced to reflect the defendants’ expenditure on the issue they lost, the claimants’ expenditure in succeeding upon it and a sanction for the defendants’ misconduct. The defendants were therefore awarded 87.5% of their Trinidad and Tobago costs on the standard basis. All their costs concerning the other jurisdictions were awarded on the indemnity basis.

5. The nominal contractual award concerning the Turks and Caicos Islands caused no loss and was insufficiently significant to justify reducing the defendants’ costs. The claimants were ordered to pay £8 million on account within 28 days, together with the agreed interest. A 14-day extension under rule 52.4(2)(a) was granted. The claimants were also ordered to pay the defendants’ costs of the costs hearing on the standard basis.

• High Court (Chancery Division), earlier merits judgment: In [2010] EWHC 774 (Ch), the court determined the legal and factual issues. It found a breach of contract warranting £2 nominal damages and otherwise rejected the claims.

• High Court (Chancery Division), present judgment: The court made the consequential dismissal and nominal-damages orders and determined costs and related matters.